Thursday, February 28, 2013

Disbarment Proposed For Foreign Legal Consultant

The Illinois Review Board has filed a recommendation that an attorney licensed as a "foreign legal consultant" be disbarred.

The review board rejected claims that the attorney's practice was properly confined:

While Respondent may have been authorized to assist his clients in immigration matters, that authorization did not extend to assisting them with incorporating and establishing businesses in Illinois. Supreme Court Rule 712(e) expressly limited Respondent to providing legal services in Illinois only on the law of the foreign country where he was admitted to practice. It prohibited Respondent from rendering advice on Illinois law (see Supreme Court Rule 712(e)(8)).

The preparation of articles of incorporation has been found to involve the practice of law in Illinois. Illinois State Bar Association Advisory Opinion 97-5 considered the question and concluded that, "while an individual may complete the forms for him/herself without receiving assistance, anyone giving advice to another in the completion of the corporate documents, such as the articles of incorporation, is unlawfully engaged in the practice of law, regardless of whether compensation is received." (Ill.St. Bar. Assn. 1995). While Respondent disagrees with this position, he has not provided us with a persuasive reason to disregard it.

The review board noted the absence of sanction precedent for misconduct by a licensed foreign legal consultant:

As the Hearing Board noted, there is no Illinois precedent for discipline of foreign legal consultants other than Respondent's prior disciplinary proceeding. Nonetheless, the circumstances of this case clearly reveal that Respondent is neither willing nor able to abide by the limitations upon a foreign legal consultant's practice. Despite Respondent's representations to the Administrator in his first disciplinary matter that he understood those limitations, he abused the privilege of his foreign legal consultant status, gave clients and other attorneys the false impression that he was licensed to practice in Illinois without limitation, and profited from his misrepresentations. Respondent's recidivism is a significant factor in aggravation that supports disbarment...

We recognize that Respondent has placed himself on inactive status and is no longer on the Master Roll of Attorneys, but we do not believe that he should have the opportunity to return to active status. We consider it unlikely that he would abide by the applicable ethical rules if he were to return to practice in the future. Therefore, we recommend that Respondent be disbarred as a foreign legal consultant. The purpose of our recommendation is not to punish Respondent, but to protect the public, maintain the integrity of the profession and protect the administration of justice from reproach.

(Mike Frisch)

February 28, 2013 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Bad Timing

The New York Appellate Division for the First Judicial Department has affirmed the dismissal of legal malpractice claims involving the handling and distribution of insurance payments for a business that was located in the World Trade Center on September 11, 2001.

The attorneys had initiated a chapter 11 proceeding on behalf of the business in August 2011.

The defendant attorneys had, by the time of the payment, moved their practice to the Marc Dreier firm.

This complicated things.

Defendants could not release the escrowed funds to their clients until the bankruptcy case was formally dismissed. They sought a "structured dismissal" of the case, negotiating with the creditors' committee and the U.S. trustee as to when and how the various interested parties would be paid by the estate. Defendants had advised plaintiffs that winding up the estate could "take some time." On September 26, 2008, after agreement with all of the necessary parties had been reached, Fox submitted a motion to the bankruptcy court to approve the voluntary dismissal of the bankruptcy proceeding. The bankruptcy court approved the dismissal in an order dated October 30, 2008. The order provided, in relevant part, for distribution of the cash held for plaintiffs within 15 days, with U.S. trustee fees being paid first, administrative expenses in the amount of $61,972.94 second, and all remaining cash to be paid to the secured creditors in partial satisfaction of the secured claim.

Following the bankruptcy dismissal order, Fox distributed $61,972.94 from a
TBF escrow account to pay the administrative fees, which largely consisted of its own legal fees. On December 2, 2008, after reconciliation of outstanding accounts with the U.S. trustee had been finalized, $3,475 was paid out of the TBF escrow account to the U.S. trustee in full satisfaction of fees. The remaining cash in the TBF escrow account belonged to plaintiffs, and was paid to them. Onthe same date, Fox sent an internal email to Dreier LLP accounting personnel requesting that a check payable to plaintiffs for $350,000 be drawn from the 5966 account and forwarded to Fox for delivery to plaintiffs.

Unfortunately and coincidentally, Marc Dreier was arrested the next day. Upon learning of the arrest, Traub immediately repeated his demand that Dreier LLP transfer funds being held in the 5966 account to the TBF escrow account. Dreier LLP acceded to this request, and the next day wired $441,145.58 to the TBF escrow account. These monies included the settlement payment to plaintiffs, as well as funds belonging to other clients of defendants. After the monies were transferred, Fox and Traub resigned from Dreier LLP and returned to TBF. On December 10, 2008, a federal district judge appointed a receiver for Dreier LLP and restrained the firm's assets. On December 16, 2008, Dreier LLP filed for bankruptcy.

The court found no basis for malpractice liability:

What separates this case from the cases cited by plaintiffs is the nature of the escrow account in which the subject funds were placed. Because the 5966 account had been used by Marc Dreier to operate his Ponzi scheme, the settlement funds became part of the pool to be distributed on a pro rata basis with the victims of the fraud (see Securities & Exch. Comm. v Credit Bancorp., 290 F3d at 89-90). Accordingly, the analysis performed in Carlson and OPM Leasing Servs. as to when the funds became the property of the intended beneficiary of the funds is irrelevant. Further, contrary to plaintiffs' argument, it makes no difference that when defendants transferred the funds to the Dreier LLP bankruptcy trustee they had been transferred to the TBF escrow account and were no longer in the escrow account which Marc Dreier had used to perpetrate his Ponzi scheme. Plaintiffs do not dispute defendants' position that the funds were transferred into the TBF escrow account with the understanding that they would not be released to plaintiffs without prior approval by whoever was ultimately assigned the tasks of sorting out the various claims which were sure to be made against the Dreier LLP bankruptcy estate.

(Mike Frisch) 

February 28, 2013 in Current Affairs | Permalink | Comments (0) | TrackBack (0)

Thunder Road

A Louisiana Hearing Committee has recommended a year and a day suspension of an attorney based on a criminal conviction reported by the attorney's "former tenant/roommate."

On July 2, 2009, the attorney

led law enforcement officers on a high-speed chase from Mississippi into Louisiana, As police units follwed Respondent with lights and sirens on, she traveled in and out of traffic and ran other vehicles off the road. Respondent finally stopped at a Rest Area and was ordered to get on the ground. She refused and was then handcuffed.

The attorney was convicted of DWI first offense and failed to cooperate with the probation imposed. There has been a warrant for her arrest out since September 2011.

Also, the attorney did not participate in the disciplinary matter. (Mike Frisch)

February 28, 2013 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Disqualification Where Defense Counsel Had Represented Witness

The Maryland Court of Special Appeals affirmed a conviction for second degree murder and other offenses.

The court rejected the contention that the defendant's desired trial counsel had been improperly disqualified.

The State had sought disqualification because defense counsel had previously represented a witness in the case.

Defense counsel asserted that his representation of the witness was brief and limited. He offered to set up a screen and have unaffiliated counsel cross-examine the witness. He further contended that, because the witness had filed a bar complaint against him, any privilege was waived.

The trial court nonetheless disqualified defense counsel, stating that: "there [] really is a conflict were this case to go to trial with [defense counsel] at the table."

The court here:

In the circuit court's view, the risk of conflict outweighed appellant's right to counsel of choice. We agree.

Ironically, the witness refused to testify at trial.

The court also rejected the screening proposal

The circuit court was not required to adopt the use of co-counsel as a solution where the court perceived that the risk of conflict would persist.

(Mike Frisch)

February 28, 2013 | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 27, 2013

Thy Brother's Keeper

The New York Appellate Division for the Second Judicial Department reaffirmed an eariler determination to impose a two-year suspension in circumstances described by the court:

Whether, and to what extent, attorneys are subject to discipline under circumstances where a defalcation was occasioned by someone other than the attorney within the attorney's firm, depends on a number of factors: (1) the subject attorney's partnership status and/or level of experience; (2) the presence (or absence) of "early warning signs" of financial improprieties, whether such signs were ignored and, if so, for how long; (3) whether the proper authorities were notified of defalcations upon their discovery; (4) the presence (or absence) of monetary loss to clients and the magnitude thereof; and (5) whether the attorney attempted to reimburse client losses caused by another (citations omitted) The foregoing factors were all considered in this matter, particularly the presence of "warning signs" and "red flags;" the extent of the clients' monetary losses; and the fact that there has been no reimbursement of the client losses caused by the respondent's brother.

The cases proffered by the respondent in support of his argument that he should be, at most, publicly censured, are inapposite. Unlike those cases, the respondent herein was charged with having been unjustly enriched by the use of clients' funds for his personal benefit, and that charge was sustained.

The most fundamental obligation of attorneys entrusted with client funds is the duty to safeguard those funds. As the Court of Appeals stated, that duty, if no other, is "crystal clear" and " a reasonable attorney, familiar with the Code and its ethical strictures, would have notice of what conduct is proscribed'" Matter of Galasso, 19 NY3d 688, *4, quoting Matter of Holtzman, 78 NY2d 184, 191). We reiterate that the respondent failed to maintain appropriate vigilance over his firm's bank accounts, resulting in actual and substantial harm to clients.

The ABA Journal had this earlier coverage. (Mike Frisch)

February 27, 2013 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Cutting Edge Scholarship In Georgetown Journal Of Legal Ethics

The Winter 2013 (Vol. XXVI, No. 1) of the Georgetown Journal of Legal Ethics has just been released.

The volume has the following:

What If Legal Ethics Can't Be Reduced To A Maxim? by Andrew B. Ayers

Achieving Procedural Goals Through Indirection: The Use Of Ethics Doctrine To Justify Contingency Fee Caps In MDL Aggregate Settlements by Morris A. Ratner

Supreme Court Recusal From Marberry To Modern Day by James Sample

Law Firm Ethics In The Shadow Of Corporate Social Responsibility by Christopher J. Whelan and Neta Ziv

Kudos to the journal editors for their fine work.

Disclosure: I am (along with my colleague Mitt Regan) co-faculty advisor to the journal. (Mike Frisch)

February 27, 2013 in Current Affairs | Permalink | Comments (0) | TrackBack (0)

Not Yet

An attorney represented an organization in defense of several employment matters from 2002-2004. The relationship ended when the client sued the attorney for malpractice.

The organization moved for disqualification in a pending case in which the attorney represented a plaintiff suing it in an employment matter. The trial court denied a motion to disqualify.

The South Carolina Supreme Court held that interlocutory appeal of the denial is not an available remedy. The issue can be addressed on appeal of the judgment. (Mike Frisch)

February 27, 2013 in Clients, Current Affairs, Law Firms | Permalink | Comments (0) | TrackBack (0)

A Level Of Transparency

The web page of the Pennsylvania Disciplinary Board has a recent post that gives the public easy access to information about its work:

The Disciplinary Board has published a table of discipline numbers for 2012.  In all, discipline was ordered  in 272 cases, down about 10 percent from last year’s 300, but right at the average for the last seven years.  Public reprimand, a new form of discipline last year, was ordered  in nine cases.  Other forms of public discipline, including probation, censure, suspension, and disbarment, were within the ranges of recent years. Private discipline, including informal admonition and private reprimand, were down by about a quarter.  Reinstatements were back to typical level, after a two-year surge following the adoption of new rules on administrative  suspension.

Statistical junkies can see the numbers here.

Here is a very detailed annual report for 2011 on operation of the Illinois ARDC. As in Pennsylvania, this report is easily found on the ARDC web page.

The Michigan system also makes information about its disciplinary operation readily available.

Massachusetts weighs in here.

If you visit this blog, you have heard this before. In the District of Columbia, I am unaware of any effort to let the public have access, much less ready access, to this type of information. (Mike Frisch)

February 27, 2013 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 26, 2013

The Bachelor Had A Wife

The New York Appellate Division for the First Judicial Department has imposed a six-month suspension for an attorney's bigamy:

The underlying facts are undisputed. Respondent married Theresa Wong in 1985. In or about 1995 he entered into an amorous relationship with Radiah Givens. Although married to Wong, respondent traveled with Givens to Jamaica, falsely informed a Jamaican government official that he was a "bachelor," executed marriage documents indicating that he was then a bachelor, and participated in a ceremony by which he and Givens were "officially married" under Jamaican law. According to respondent, Givens understood that their purported marriage was not a legal union, and they had no plans to cohabit after the Jamaican ceremony.

The court rejected public censure as the sanction:

That respondent's misconduct involves his personal life only, does not necessarily warrant a sanction less severe than suspension (see Matter of Gurevich, 94 AD3d 39 [1st Dept 2012] [18-month suspension for misconduct arising in the context of a commercial real estate transaction to which therespondent was a party]; Matter of Zulandt, 93 AD3d 77 [1st Dept 2012] [three-year suspension for misconduct stemming from an incident of domestic violence resulting in a misdemeanor assault conviction]; Matter of Bikman, 304 AD2d 162 [1st Dept 2003], lv denied, 100 NY2d 506 [2003] [18-month suspension for deceiving the landlord of a rent controlled apartment by submitting rent checks purportedly bearing the signature of the respondent's deceased sister]). On this record, we find that a six-month suspension is the appropriate sanction.

(Mike Frisch)

February 26, 2013 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)


The Kansas Supreme Court has imposed  disbarment of an attorney who, among other things, entered into a contingent fee agreement with a domestic relations client, engaged in a sexual relationship with a client, converted and commingled client property and other trust account violations, and provided a court with a false billing statement.

The attorney did not advance his position effectively in oral argument before the court:

At oral argument in this case, respondent demonstrated no real perception of the significance of his numerous violations of the rules of professional conduct. Nor did he fully accept responsibility for his violations, instead describing himself as "a white knight" who allowed himself to be led by his heart. Respondent's inability to understand or take responsibility for the nature and breadth of his professional misconduct underscores the signidicance of the misconduct and engenders our decision that disbarment from practice is the appropriate sanction.

A minority of the court would impose an (unspecified) lesser sanction. (Mike Frisch)

February 26, 2013 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Monday, February 25, 2013

New Frontier In Florida

The excellent blog SunEthics has a recent decision of the Florida Third District Court of Appeal that is worth a look.

The case involves Great American assurance Company's use of a single law firm to defend the University of Florida and MagiCamp, which ran a summer swim camp for children on the UM campus.

The suit was brought by the parents of an injured child.

The court held that there is a disqualifying conlict between the two defendant clients as they blame each other for negligence.

A dissent states that "[t] he court today opens a new frontier in insurance litigation of benefit only to the legal profession."

According to the dissent, the case involves obnly a conflict among insureds and would affirm summary judgment to the insurancr company. (Mike Frisch)

February 25, 2013 | Permalink | Comments (0) | TrackBack (0)

Four Hats

An attorney who engaged in a conflict in interest in an adoption matter has been reprimanded by a panel of the Arkansas Committee on Professional Conduct.

The attorney represented the birth mother, the newborn child (as court-appointed temporary guardian), and the couple seeking the adoption. She also had a personal conflict of interest.

The attorney also had failed to disclose her conflicts in a conference call and correct statements made during that call. (Mike Frisch)

February 25, 2013 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Suspended Only From Appellate Practice

An Arkansas Committee on Professional Conduct panel imposed discipline on an attorney who had failed to file a timely appeal and brief in a criminal matter.

When the brief was filed, he failed to cite any authority for an argument that the evidence was insufficient or that the trial court had committed error.

One interesting aspect -- the attorney is suspended from appellate practice before the Court of Appeals and Supreme Court of the state for a period of twelve months. He will remain free to practice everywhere else in Arkansas. (MIke Frisch)

February 25, 2013 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Plaintiff's Counsel In Kilpatrick Litigation Suspended, But With Time Served

The Michigan Attorney DIscipline Board has ordered a 30 day suspension in the second disciplinary matter brought against the attorney for the plaintiffs in the noted Kwame Kilpatrick whistleblower cases.

The board rejected the attorney's claim that the proceeding was barred by the doctrine of res judicata.

The board attaches the decision of the hearing panel and notes that the "general factual background for this and other discipline cases arising from the settlement of thoase civil cases is generally well-known."

The misconduct revolved around efforts to keep certain text messages confidential.

The hearing panel had imposed a reprimand, with a dissent that would have suspended the attorney for 90 days.

The attorney will receive credit for time served on the 30 day suspension imposed in the first disciplinary case. (Mike Frisch)

February 25, 2013 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Friday, February 22, 2013

Reinstated Without A "Scarlet Letter Of Shame"

The Alaska Supreme Court has granted the reinstatement peition of an attorney who was disbarred in 1994.

He was disbarred primarily for an affidavit that falsely claimed that a judgment on behalf of a client was unpaid and forging a client's endorsement on a check.

Among the other violations were making sexual advances toward a client and kicking opposing counsel.

The petitioner has sought and been denied reinstatement on four prior attempts.Here, the court agreed with the favorable recommendation for reinstatement, concluded that he had matured and was rehabilitated.

The court concluded that reinstatement should be subject to a three year mentoring period, which was not "punitive or excessive."

However, the court did reject the imposition of a requirement that the petitioner "advise potential future clients of the fact and basis of [his] previous disbarment..." as proposed by the Disciplinary Board.

Such a "scarlet letter of shame" was not appropriate as the decisions leading to his disbarment and efforts to secure reinstatement are "readily available to any potential client who chooses to conduct research prior to retaining [him]." (Mike Frisch)

February 22, 2013 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Learning To Live With Disappointment

The Kansas Supreme Court has imposed a six-month suspension and "hoped this period of suspension, sooner rather than later, will impress upon respondent the seriousness of his situation and the necessity that he seek professional counsel and assistance in order to regain his ability to practice law."

The court quoted the hearing panel report concluding that the attorney's modus operandi was to "make threats as a matter of standard practice." He

went from collecting a fee to a personal vendetta. When [he] personalized the litigation, [he] showed a serious lack of professionalism...[He] must come to realize that if he continues to practice law, he will be repeatedly disappointed in the results of his cases as are all lawyers and he has to learn to live with that instead of setting out to punish all who disagree with him.

(Mike Frisch)

February 22, 2013 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

In The (Forged) Name Of The Father

The Louisiana Supreme Court imposed a suspension of a year and day, with all but six months deferred, for the commission of a criminal and dishonest act.

The attorney "twice forged her deceased father's name on documents needed to transfer the title of a 1995 Dodge Neon to her name."

She also must make restitution to her parents' estate in the fair market value of the car. (Mike Frisch) 

February 22, 2013 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)

Heart In Montana But Iowa For Eternity

A woman executed a will that specified her wish to be buried in a "moderately priced wooden coffin" in a family plot located in Billings, Montana.

Her wishes in that regard were reaffirmed in a letter to her family prior to her death, where she noted that she had "bought a casket made by [Trappist] Monks" to hold her remains.

She also identified Billings as her earthly home and ended with this:

I know that you all love me and want to honor my final requests, and that is why I am writing this to you. I just want all of you to know that this is very important to me and because you all love and respect me I know that you will see my wishes are carried out.

 When she passed away, her husband of sixty years decided to place her at permanent rest in Iowa.

The Iowa Supreme Court held today that the rights of the surviving spouse trump the wishes of the decedent and that the husband could proceed as he wished.

There is a dissent by Chief Justice Cady, joined by Justice Zager:

I am confident our legislature did not intend the result in this case, nor to render future generations of Iowans powerless to direct for themselves their funeral arrangements and final disposition of their remains.

The remains remained at an Iowa funeral home pending a final court order.

The Gazette reported yesterday that the husband is a retired attorney who had separated from the deceased in 1996. She took ill and died while visiting him in Iowa. (Mike Frisch)

February 22, 2013 | Permalink | Comments (0) | TrackBack (0)

New Jersey Upholds Denial Of Handgun Carry Permit For Outside Home

The New Jersey Appellate Division has rejected an asserted Second Amendment violation in a case that involves the denial of a permit to carry a firearm outside his home.

The applicant sought to establish his justifiable need to carry because he received substantial cash payments in connection with his landscaping business. The trial court rejected his contention regarding his justifiable need.

Both trial and appellate court rejected the constitutional claim, as stated by the Appellate Division:

...given the presumption of constitutionality, the lack of clarity that the Supreme Court in Heller intended the extend the Second Amendment right to a state regulation of the right to carry outside the home, and the Second Circuit's explicit affirmation of a law similar to ours, we affirm [the trial court's] determination that [applicant's] rights were not infringed.

The State had appealed a police chief's decision to issue a permit to the applicant. (Mike Frisch)

February 22, 2013 in Current Affairs | Permalink | Comments (0) | TrackBack (0)

MW Services

An Illinois attorney has moved by consent disbarment based on a statement of charges that alleges:

 Between 2001 and 2012, Movant worked for the American Library Association ("ALA") as the General Manager of Booklist Publications, a non-legal position. In this capacity, Movant had the authority to request checks for amounts less than $5,000 in order to pay vendors. Movant’s supervisor, Bill Ott ("Ott"), who was required to approve Movant’s check requests, had given Movant permission to initial requests on his behalf.

On February 23, 2006, Movant opened a checking account at Washington Mutual (now Chase Bank). This account was entitled, "Mary Wilkens d/b/a MW Services." "MW Services" was a fictional entity created and used by Movant in order to give the appearance that she was requesting checks from the ALA to be paid to a legitimate business vendor for services rendered, when in fact Movant intended to personally receive the benefits of the checks’ proceeds.

Between 2006 and 2012, Movant made at least 29 fraudulent check requests to the ALA accounting department, requesting that the checks be made out to a vendor identified as "MW Services," in various dollar amounts. Movant placed Ott’s initials on all of the check requests made for "MW Services," without Ott’s specific knowledge as to the intended purpose of those check requests.

Between 2006 and 2012, the ALA accounting department authorized payment on, and subsequently delivered to Movant, at least 29 checks made payable to "MW Services." The amount of the checks made payable to "MW Services" totaled $174,300.53.

The statement also reflects that $175,000 was paid in restitution. (Mike Frisch)

February 22, 2013 in Bar Discipline & Process | Permalink | Comments (0) | TrackBack (0)